Correlation Between Vodafone Group and 88 Energy
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and 88 Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vodafone Group and 88 Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodafone Group PLC and 88 Energy, you can compare the effects of market volatilities on Vodafone Group and 88 Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vodafone Group with a short position of 88 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and 88 Energy.
Diversification Opportunities for Vodafone Group and 88 Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vodafone and 88E is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and 88 Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 88 Energy and Vodafone Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vodafone Group PLC are associated (or correlated) with 88 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 88 Energy has no effect on the direction of Vodafone Group i.e., Vodafone Group and 88 Energy go up and down completely randomly.
Pair Corralation between Vodafone Group and 88 Energy
Assuming the 90 days trading horizon Vodafone Group PLC is expected to generate 0.29 times more return on investment than 88 Energy. However, Vodafone Group PLC is 3.5 times less risky than 88 Energy. It trades about 0.0 of its potential returns per unit of risk. 88 Energy is currently generating about -0.04 per unit of risk. If you would invest 7,476 in Vodafone Group PLC on September 1, 2024 and sell it today you would lose (388.00) from holding Vodafone Group PLC or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vodafone Group PLC vs. 88 Energy
Performance |
| Timeline |
| Vodafone Group PLC |
| 88 Energy |
Vodafone Group and 88 Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and 88 Energy
The main advantage of trading using opposite Vodafone Group and 88 Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, 88 Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 88 Energy will offset losses from the drop in 88 Energy's long position.| Vodafone Group vs. Tungsten West PLC | Vodafone Group vs. Argo Group Limited | Vodafone Group vs. Hardide PLC | Vodafone Group vs. Versarien PLC |
| 88 Energy vs. Thor Mining PLC | 88 Energy vs. GoldMining | 88 Energy vs. Aeorema Communications Plc | 88 Energy vs. Zegona Communications Plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |